ABSTRACT
Consuming nations must adjust to the new reality of oil scarcity. Such an adjustment requires on a part acknowledging the legitimacy of higher oil prices, acknowledging the legitimacy of higher gross profits for the oil multinationals, dismantling government control on prices, and the need to be more responsive to the non-economic interests of the Middle East OPEC nations.. In industry, oil experts and independent consultants added to the swelling stock of oil information and misinformation. Market imperfections in the case of oil are man-made, designed and executed by government to obtain objectives that are both unwarranted and unobtainable. Ironically, the moderate misnomer used by Conventional Wisdom became, itself, an instrument of Saudi threat against the US on the issue of the F-15 sale to Saudi Arabia. Saudi Arabia is moderate regardless of Saudi behavior because the issue in question isn’t moderation at all—it is oil.
